Financial Times

SriLankan Airlines saves Rs. 6 billion through cost restructuring measures

National carrier, Sri Lankan Airlines has saved Rs. 6 billion through its restructuring and cost saving measures implemented in the last accounting year (2008/09 upto March 31, 2009) and the company is forging ahead with some more cost cutting initiatives this year, according to a top official.

"From this July onwards we suspended all staff increments, bonuses, inducements and allowances and 90% of the unions agree with these measures," Manoj Gunawardena, CEO, Sri Lankan Airlines told the Sunday Times FT.

Manoj Gunawardena

He said the company has also agreed on a two-day voluntary pay cut for a month for the staff, which works out to a half month's pay per person per year. "The total saving with this initiative is about Rs. 1 billion for a year. With this initiative we want to show we have a personal commitment to uplift the airline, "he said.

He said last year's ‘Business Turnaround Plan’ saw the company restructuring its passenger and cargo revenue generation, restructuring of route network, savings through increased fuel efficiency, reducing company fixed costs, renegotiating of contracts with service providers, optimizing of sales channels, careful targeting of publicity efforts, reduced IT and communication cost and increasing productivity while focusing on People, Processes, and Technology.

“Another key initiative was the setting up of a specialised department for aviation fuel, with the responsibility of optimizing fuel efficiency, the control of costs and the elimination of wastage in all departments and activities of the organization. These included identification of the largest cost items, renegotiation of contracts with suppliers, and by simply finding ways by which to do things in a less expensive and more efficient manner," he added.

He said the tourism industry is looking forward to the 2009/10 Winter Season with much expectancy, and a number of important European tour operators have already agreed to feature the island's attractions in their brochures, while the opening up of the eastern beaches have provided an added dimension with year-round possibilities that are not subject to the seasonal monsoon.

He said the group's revenue for last year was Rs. 74.2 billion compared to Rs. 80 billion in 2007. "Since the operating expenditure rose slightly to Rs.84.4 million last year from Rs. 81.7 million in 2007 mainly due to the fuel price increase, Sri Lankan posted a loss before tax of Rs. 9.9 billion for 2008, against the Rs. 4.9 billion in 2007," he said.

He said the net loss after tax was Rs. 9.9 billion last year compared to the Rs.4.8 billion net profit in 2007. He said November will see the staff uniforms change in the company. "We will change the appearance of all our customer touch points including the cabin crews and we will go for a colour change," he said.

 
Top to the page  |  E-mail  |  views[1]
 
Other Financial Times Articles
Lanka’s forex reserves surge
F&G directors meet in Welikada prison on payment plan
Top investor Jim Rogers visits Sri Lanka
SLIC board's random decisions irk staff
Police caught flat-footed on public-smoking arrests
SLT facing an internal crisis
Kotelawala, GK directors meet at Central Bank
COMMENT - Jim Rogers was here!
Fallacy and the reality of IMF Standby Arrangement for Sri Lanka
CIMA/ICMA - Accounting qualification battle rages on
‘Small Miracle’ Tagline is no more
HNB opens commercial operations for remittances from Canada
Terminations, VRS and workforce restructuring on the rise
Developing nation consumers prefer mobiles for Internet access
Call for more engineers to be produced
Distilleries profits drop sharply
Summa Navaratnam ends mercantile career of over five decades
Managing properties in Sri Lanka and overseas as local industry takes off
The new silver frosted proof coins
Pakistan Civil Aviation hires MTI Consulting
Improved agricultural knowledge access through IT
Sri Lanka's banking technology leads region
SIA to fly to Melbourne with A380
Textured Jersey to supply fleece fabric for Pink, the No.1 lounge wear brand
New war strategies succeeded against LTTE
Dispute once again over SLT Tariffs
Lalith W wants the Public Service to be courteous
Seven judge SC bench to hear PBJ case
Garment exports down for second month in a row
Garment factories invited to go North
Bilingual education system showing good results – Education Ministry
Fewer students attracted to marketing field this year
EFC study on training needs of SMEs
Education opportunities in New Zealand
UK Sri Lankan Business Directory launched
Micro Cars to manufacture container trucks and tractors for the North and East
Upcoming IT park: Orion City ties up with Suntel
‘Garments without Guilt’ campaign gets another global award
A wise call on Colombo South Port
Competitors threaten to stop interconnect to Airtel
Sukuk certificates to attract Muslim millions for post-war development
HNB shows slight increase in profits
CCC receives applications for this year’s CSR awards
Allianz Lanka continues growth performance into 2Q09
SriLankan Airlines saves Rs. 6 billion through cost restructuring measures
Privatisation: Myth and reality
Singer net profit down for 1H09 and 2Q09
Lankan entrepreneur nominated for biz award
400 stalls at 2009 Colombo International Book Fair
NDB an attractive option for a merger
Local companies yet to face true global competition
LankaClear net profit drops in 2008/09 Financial Year
Huge remittances through Seylan Bank

 

 
Reproduction of articles permitted when used without any alterations to contents and a link to the source page.
© Copyright 2009 | Wijeya Newspapers Ltd.Colombo. Sri Lanka. All Rights Reserved.| Site best viewed in IE ver 6.0 @ 1024 x 768 resolution